Anchor resume from 19 to 26 of January 2018
Friday, 26 of January 2018
This week focus
World Economic Forum in Davos,
IMFC - International Monetary and Financial Committee,
We ended a week in which the focus was on the agenda of the World Economic Forum in Davos, as well as in the monetary policy meetings of the European Central Bank and the Bank of Japan.
In Davos, the main business and political leaders worldwide, have discussed the main global challenges, among which are environmental problems and the need to integrate efforts against social inequality. In addition, it has been the scene of bilateral meetings between governments.
On the other hand, as expected by the market, the ECB at its meeting decided to keep the current interest rates; the president of the entity Mario Dragui announced the ECB's intention to maintain rates for a prolonged period, beyond the completion of the asset purchase program. Regarding the appreciation of the Euro, Dragui considered that some movements are due to the strength of the region's economy, however, he also referred to the statements of US treasury secretary Steven Mnuchin, who in his speech in Davos, explained that a weak dollar is favorable for the foreign trade of his country, Dragui said that "the use of language does not reflect the terms of reference agreed", citing the agreements against the competitive depreciation of the International Monetary and Financial Committee.
Although the ECB makes it clear that there is still a long way to go before the rate hike starts, the EUR / USD rose to levels close to 1.25; the concern is shown by the impact that the strength of the single currency will have on the competitiveness of companies and the recovery of inflation. In this sense, the main European indices have slowed down their momentum and ended the week without major advances. The DAX closed around 13,320 points, the Ibex35 remained above 10,500 points, while the Eurostoxx50 closed at 3,645 points.
In line with the ECB's decision, the Bank of Japan has also decided to keep its interest rates unchanged at levels of -0.1%. In a scenario in which inflation is still far from the 2% target, while economic growth is sustained. He hopes that the price increase will accelerate slightly as the wage increases expected during the negotiations between the business sector and unions for the next few weeks are given.
In the political sphere, Germany is approaching a government agreement, the chances of the German Chancellor Angela Merkel to lead the country for a fourth term received a boost during the last weekend when the Social Democratic Party voted to enter into negotiations. After the approval, the dialogues have formally begun to put an end to the political crisis unleashed after the last
At the corporate level, the publication of results in the United States continues, which, in general terms, have shown net benefits above expectations, despite the fact that the main companies in the financial sector have been affected by the rate on repatriated funds. , according to the last approved tax reform. Thus the bullish movements in the North American indices continue and add another week with positive variations.
Regarding the macro data, the PMIs both manufacturing and preliminary services in January in Germany and the Euro Zone in general continue in the expansion zone and do not allow to see changes in the trend, while the investor confidence Euro Zone It stood at 31.8 exceeding expectations, while the German investor confidence index in January surprised the upside and stood at 20.40.
In the United Kingdom, the unemployment rate stood at levels of 4.3% in line with market expectations, while the preliminary revision of the year-on-year GDP for the fourth quarter stood at 1.5% (after 1.7%, estimate 1, 4%). While in Spain the unemployment rate stood at 16.55% for the end of 2017, against a forecast of 16.15%.
Regarding the behavior of raw materials, oil continues to advance and is trading at around 70 usd / barrel supported by OPEC and Russia's intention to maintain production cuts and the possibility of giving continuity to agreements in 2019 Gold, on the other hand, is located at levels of 1,347 usd / oz.